Our aim is to educate the Australian consumer in the home loan process, make you aware of the responsibilities that your mortgage broker has and also to raise public awareness of the mortgage industry in general. Please feel free to use our home loan calculators and other home loan resources.
The mortgage brokers from around Australia listed on Mortgage Broker.com.au strive to make you the consumer their number one priority. Our goal is to provide consumers with the highest level of professional expertise available and to instill public confidence in their endeavour to own THE GREAT AUSTRALIAN DREAM.
Westpac? Bluestone? PLAN Lending? AFM? The MFAA, FBAA? Find out exactly who is who in the mortgage industry......
When the finance industry became deregulated in the late 1980's the mortgage industry became very competitive. This has made getting a home loan much easier, and has pushed for greater flexibility, competitive interest rates, fees and charges.
As a result many players have entered the game - so much so that almost 37% of home loans are provided by the mortgage brokers or mortgage managers.
In saying that, many are confused with who's who! The following information will help you identify all of the players in the home loan game.
The lenders are one of two types - TRADITIONAL and NON-TRADITIONAL.
You will be most familiar with traditional lenders. These are the banks, credit unions and building societies. Traditional lenders are authorised 'deposit taking institutions' (ADI's). They use their own funds to provide home loans throughout Australia. You can obtain a home loan directly from the lender however the majority of lenders also supply their loans through professional accredited mortgage brokers. Each lender has their own policies and lending criteria that must be met to recieve a home loan through them. Once your home loan is approved and has reached the stage of settlement, they will manage and administer the facility for its term.
The non-traditional lenders are also known as wholesale or non-conforming lenders. Unlike traditional lenders, they obtain their funds through investors, financiers or trust funds. Some non-traditonal lenders appoint a mortgage manager to package, distribute, manage and administer the home loans on their behalf. They may also be distributed through a mortgage broker.
Non-traditional lenders also have their own policies and lending criteria, however they are generally more flexible than traditional lenders.
Now you know the source of your home loan - next on the list are mortgage intermediaries or those who help you and the lender to come together.
Mortgage Brokers are intermediaries between borrowers and both the traditional and non-traditional lenders. They each have a panel of lenders that they are accredited with or they are authorised to write home loans for. A mortgage broker will manage and administer the loan process up to settlement on behalf of the borrower.
Because they do not usually act solely on behalf of one lender, they can offer you a selection of home loans, and help you choose the best facility that suits your personal and professional needs. After your home loan has settled your mortgage broker should continue to ensure you have the right home loan as your circumstances and the lender's products and policies change over time.
The majority of mortgage brokers do not charge you for their services as they are paid a commission by the respective lender that they introduced you to. In some states of Australia mortgage brokers are required to fully disclose all details of the home loan transaction including any monetary or non-monetary benefits they receive. This will no doubt be required in other states before long.
Mortgage managers are again intermediaries between traditional and non-traditional lender's and borrowers. They provide home loan products and will administer and manage the home loan from the point of application and throughout the life of the home loan. They will also access the home loan application and will arrange the funds in the process to settlement. Loan payments are made directly to the lender - not the mortgage manager.
Mortgage managers are paid through loan application establishment fees from the borrower, and the management fees from the non-traditional lender. They can affect the fees and charges you will pay and can also influence the interest rate of your home loan.
AGGREGATORS AND FRANCHISE GROUPS
The vast majority of mortgage brokers belong to an aggregator or franchise group. These groups provide business support to it's mortgage brokers with administration, technology systems software, education, training, communication and marketing.
As a borrower you have two options in obtaining a home loan. You can shop around and apply for a home loan directly through a traditional lender, non-traditional lender or mortgage manager. Alternatively you can seek the services of a professional mortgage broker on this site to research suitable home loans and find a home loan which suits your individual needs. The number of lenders a mortgage broker is accredited with will vary.
MORTGAGE INDUSTRY BODY
The Mortgage & Finance Association of Australia (MFAA)
The Finance Brokers Association of Australia (FBAA)
The Credit Ombudsman Services Limited (COSL) is the ASIC compliant dispute resolution service.
All of these industry bodies are there for consumer protection and to continue the professional development of their members.
Who is the MFAA? (Formerly the MIAA)
The Mortgage & Finance Association of Australia (MFAA) is the peak body for the Australian mortgage industry. Members of the MFAA include traditional lending institutions, mortgage managers, credit unions, mortgage brokers, wholesale funding institutions, real estate agents, valuers, solicitors and conveyancers.
All MFAA members are required to belong to an independent dispute resolution scheme, such as the Credit Ombudsman Service Limited (COSL) or other industry related body. Loan writing members are also required to become MFAA Accredited Mortgage Consultants (AMC).
An MFAA AMC is covered by professional indemnity insurance, has taken part in and passed probity checks, and has met at least minimum education and experience requirements set out by the MFAA.
Our Mission and Objectives Mission To ensure the orderly and ethical working of the mortgage industry in Australia.
Who is the FBAA?
The activities of the FBAA originally commenced in 1992 in response to the growing incidence of bad publicity of the profession and to become a voice for finance/mortgage brokers.
The FBAA is run by an elected Board of Directors supported by a National Executive comprising all State Presidents and a secretariat.
It was formed in the belief that the establishment of measurable standards of proper professional practice in sourcing domestic and commercial funding was in the best interests of its customers/consumers and vital to the integrity and future well being of the finance/mortgage broking industry.
Published within an industry recognised Code of Practice, these standards have been adopted by an increasing number of industry professionals who offer domestic finance, commercial finance, lease and motor vehicle finance, business and debtor finance, as finance/mortgage brokers.
FBAA members must meet minimum education and experience requirements, hold current Professional Indemnity Insurance and be members of COSL or other industry related body, and also pass probity checks set out by the FBAA.
What is the Credit Ombudsman Service Limited (COSL)?
The Credit Ombudsman Service Limited (COSL) is the new name of the Mortgage Industry Ombudsman Scheme (MIOS). COSL is the ASIC compliant dispute resolution service that all MFAA members must belong to and abide by, unless otherwise exempted due to belonging to another ASIC compliant dispute resolution service.
MIOS (now COSL) was established by the Mortgage Industry Association of Australia in 2000 in conjunction with the MFAA Code of Practice. In 2003 it was placed 'at arms length' from MFAA, to become an Independent Dispute Resolution Service, and in February 2004 changed its name to the Credit Ombudsman Service Limited (COSL).
COSL provides Consumers with an alternative to other legal proceedings to resolve disputes free of charge to those customers. It is a requirement of all MFAA and FBAA members to be a member of COSL, unless they are members of another ASIC approved Alternative Dispute Resolution Scheme, in which case they may be exempted from COSL membership. COSL is administered by a Board comprising 2 directors nominated by MFAA, 2 directors nominated by the Consumers Federation and an independent Chair.
For more information on COSL, including COSL rules, COSL Membership and Membership Applications, complaint procedures, and contact details, visit the COSL website.